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Author: Admin | 2025-04-28
2022. The downfall of Luna and TerraUSD offers a case study in crypto hype and who is left holding the bag when it all comes crashing down. Mr. Kwon's rise was enabled by respected financiers who were willing to back highly speculative financial products. Some of those investors sold their Luna and TerraUSD coins early, reaping substantial profits, while retail traders now grapple with devastating losses.^ Vidal-Tomás, David; Briola, Antonio; Aste, Tomaso (1 September 2023). "FTX's downfall and Binance's consolidation: The fragility of centralised digital finance". Physica A: Statistical Mechanics and Its Applications. 625: 129044. arXiv:2302.11371. Bibcode:2023PhyA..62529044V. doi:10.1016/j.physa.2023.129044. ISSN 0378-4371.^ Melinek, Jacquelyn (12 May 2022). "Terra resumes blockchain production after halting to prevent hacks amid UST crash". TechCrunch. Archived from the original on 12 May 2022. Retrieved 15 May 2022.^ Liedtka, Dave (15 May 2022). "Whereabouts of Terra's Bitcoin Reserve a Mystery After Transfers". Bloomberg. Retrieved 16 May 2022.^ Jang, Hyung-tae (16 May 2022). "테라 폭락 속... 권도형의 4조5000억 비트코인은 어디 갔나" [Amid the Terra Crisis, Where Did Kwon Do-hyung's ₩4.5 Trillion of Bitcoin Go?]. The Chosun Ilbo (in Korean). Archived from the original on 16 May 2022. Retrieved 16 May 2022.^ "Wild week in crypto ends as Bitcoin and stablecoin tumble". PBS NewsHour. 13 May 2022. Retrieved 17 May 2022.^ a b Nieva, Richard; Sethi, Aman (14 May 2022). "Why Crypto Cratered: 5 Things You Need To Know". BuzzFeed News. Retrieved 17 May 2022.^ Ostroff, Caitlin; Yu, Elaine; Kiernan, Paul (11 May 2022). "Cryptocurrency TerraUSD Plunges as Investors Bail". Wall Street Journal. ISSN 0099-9660. Retrieved 17 May 2022.^ Lopatto, Elizabeth (20 May 2022). "How the Anchor protocol helped sink Terra". The Verge. Archived from the original on 27 May 2022. Retrieved 31 May 2022. The problem with algorithmic stablecoins is that they fail. They fail because they rely on things they can't control: investor demand; people who will perform the stabilizing arbitrage; and reliable price information. In the specific case of Terra, it seems likely that an unusually large withdrawal knocked the system out of balance. After that, there was a death spiral.^ Shukla, Sidhartha; Nicolle, Emily (25 May 2022). "Terra Averts Total Collapse With Plan to Split Blockchain, Abandon UST Stablecoin". Bloomberg. Archived from the original on 25 May 2022. Retrieved 31 May 2022. A proposal by the founder of the troubled Terra ecosystem to salvage the project was approved, averting a total collapse of one of the most-watched experiments in decentralized finance ... The process means Terraform Labs is effectively abandoning the stablecoin TerraUSD, or UST, which from now on will only trade on the Terra Classic blockchain as USTC.^ Shen, Muyao (25 May 2022). "Luna token relaunch kicks crypto hype machine back into gear". The Boston Globe. Archived from the original on 26 May 2022. Retrieved 31 May 2022. Under the approved measure, the original blockchain will split off and be known as Terra Classic, while Luna, which plunged close to zero this month, will be renamed Luna Classic with the ticker LUNC. The new Terra
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